ECONOMY WEEKLY: WEEK OF APRIL 26, 2010

“Recent months have delivered a stream of news bolstering the notion of a more vigorous recovery. Technology companies have racked up substantial sales. After a decade of painful decline, manufacturing is tentatively adding jobs. Retail sales increased by 9.1 percent in March at established stores compared with a year earlier, according to Thomson Reuters, marking the seventh consecutive month of growth. Exports swelled in the first two months of the year by nearly 15 percent compared with a year earlier, according to the Commerce Department. Still, much of the improvement appears the result of the nearly $800 billion government stimulus program.”
- New York Times, 4/26/2010

Economy Highlights:

• Today, the Department of Commerce reported that the economy (GDP) grew 3.2% in the first quarter of 2010, the third straight quarter of growth. “[D]etails of the report were fairly upbeat, with consumer spending accelerating at a 3.6 percent rate, more than double the 1.6 percent pace in the fourth quarter. The first-quarter rise was the largest since the first quarter of 2007. Consumer spending, which normally accounts for 70 percent of U.S. economic activity, added 2.55 percentage points to GDP last quarter, the biggest percentage contribution since the fourth quarter of 2006.” [Reuters, 4/30/10]

• A survey from the National Association for Business Economics indicates that Americans can expect to see expanded job growth in the next six months, with economists predicting that “more U.S. companies plan to boost payrolls as sales strengthen and the outlook for economic growth brightens…. Thirty-seven percent of those polled said they project an increase in hiring within the next six months, up from 29 percent in January…. Twenty-four percent of the respondents said they expect the economy will expand faster than 3 percent in 2010, up from 14 percent who forecast that pace in January.” [Bloomberg, 4/26/2010]

• The Conference Board's consumer confidence index rose almost six points in April to 57.9, the highest level since September 2008, and exceeding economists’ forecast. The group indicated that “gains in its monthly survey of consumers largely reflected improvements in the labor market as more people said jobs were plentiful and business conditions were good in April…. Consumers' willingness to spend is key to how the economic recovery progresses this year.” [Washington Post, 4/28/2010]

Recovery Highlights:

• Vice President Joe Biden and Secretary of Energy Steven Chu announced $106 million in Recovery Act funding for 37 research projects – funded through DOE’s Advanced Research Projects Agency-Energy (ARPA-E) – to accelerate innovation in clean energy technologies, increase America’s competitiveness, and create jobs. “The grants will go to projects in 17 states. Of the lead recipients, 24 percent are small businesses, 57 percent are educational institutions, 11 percent are national labs, and 8 percent are large corporations…. The awards are part of an overall $100 billion investment the Recovery Act is making in creating jobs and driving economic growth through innovation, science and technology.” [Department of Energy, 4/29/2010]

• This week, the Council of Economic Advisers (CEA) released a report outlining what the Obama Administration is doing to strengthen the economy in rural America. “The newly-released CEA report outlines four categories of Administration’s policies to lay a foundation for 21st-century growth that will continue to strengthen and diversify the rural economy, support rural workers and businesses, and put rural America on a path toward a more prosperous future. Many of these policies are already being implemented through the American Recovery and Reinvestment Act of 2009. But further work remains to ensure the prosperity and vitality of Main Streets across America.” [White House Council of Economic Advisors, 4/27/2010; Full text of report]